Usual approaches for estimating the variance of a standardized rate may not be applicable to rates of recurrent events.

Where individuals are prone to repeated health events, Greenwood and Yule (J R Stat Soc [A], 1920;83:255-79) advocated use of the negative binomial distribution to account for departures from the assumption of randomness of recurrent events required by the Poisson distribution.

In this paper, the authors implemented the negative binomial distribution in the computation of annual hospitalization rates within certain hospital market areas.

Data used were from 1,549,915 New England residents aged 65 years or more who were enrolled in Medicare between October 1, 1988, and September 30, 1989, and who had 458,593 hospital admissions during that year.